Is the worst over for the Eurozone?

Friday’s release of Markit’s latest composite PMI for the Eurozone was at its strongest level since March last year raising hopes that the struggling region may be on the brink of emerging from the worst of its downturn.

The PMI, which measures business activity across the single currency zone showed a rise of 47.2 in December, up from 46.5 in November. The figure is still below the 50 line that divides growth from contraction and has been for eleven months in a row but the signs are there that the region is heading in the right direction.

Survey compiler Markit warned that Friday’s figures would probably fail to prevent the euro zone’s recession deepening in the fourth quarter of last year, thanks to dismal figures in October and November.

“The surveys at least bring some substance to the belief that the worst is over and that a return to growth is in sight for the region in 2013,” said Chris Williamson, chief economist at Markit.

“The surveys rose to multi-month highs in all four of the largest euro member countries, suggesting that rates of decline eased in Italy, France and Spain while the economic situation stabilised in Germany.”

The services sector, which makes up the majority of the Eurozone’s economy showed signs of improvement, with businesses ranging from restaurants to banks reporting increases in trade. The sector posted a five month high of 47.8 up from 46.7 in November. The manufacturing sector meanwhile continued to post disappointing figures after the terrible end to 2012.

German Finance Minister Wolfgang Schaeuble said last week he thought the worst had past for the debt crisis, although those words have been uttered by various European policymakers and politicians since mid-2010.

The outlook for the next few months is still very unclear but let’s hopes that the worst is indeed behind us.

The Pound to Euro exchange rate is currently trading at 1.2327

The Pound to US Dollar exchange rate is currently trading at 1.6042

The Pound to Australian Dollar exchange rate is currently trading at 1.5396

The Euro to US Dollar exchange rate is currently trading at 1.3011

The Euro to Pound exchange rate is currently trading at 0.8110

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